Brambles Limited · ASX:BXB
Brambles — FY2021 Earnings Presentation
39 slides from Brambles's earnings presentation, Aug 17, 2021
Slide 1: Pioneering Regenerative Supply Chains: Full-Year 2021 Results presentation
Full-Year Pioneering 2021 Results presentation Regenerative 17 August 2021 Supply Chains
Slide 2: Results highlights
1 Results highlights GRAHAM CHIPCHASE, CEO
Slide 3: FY21 highlights
FY21 highlights FY21 result ahead of guidance, delivered in a high inflationary environment Strong revenue growth with Underlying Profit leverage • Sales revenue +7%1 reflecting price realisation and volume growth in the global pallet business and a recovery in the automotive business; • Underlying
Slide 4: FY21 operating environment
FY21 operating environment Accelerating inflation and ongoing uncertainty across global supply chains • COVID-19 and Brexit continued to create volatility and disruptions in supply chains • Elevated and unpredictable demand as manufacturers and retailers responded to high levels of at-home consumpti
Slide 5: Dividends and capital management
Dividends and capital management Dividend in line with policy, on-market share buy-back to complete in FY22 Dividends • Final dividend of US10.5 cents declared, converted and paid as A14.24 cents and franked at 30% • Total dividends declared related to FY21 were US20.5 cents • FY21 dividend payout r
Slide 6: Sustainability and ESG credentials
Sustainability and ESG credentials Building on global leadership position in sustainability External independent recognition of ESG 2025 targets launched with the ambition to credentials: 'Pioneer Regenerative Supply Chains' #2 most sustainable Progress on 2025 targets in FY21: international company
Slide 7: Shaping Our Future
Shaping Our Future Transforming our business to drive a step-change in value creation • In FY21, Brambles developed a range of existing initiatives and identified new opportunities to deliver a step-change in its transformation ambition through its 'Shaping Our Future’ programme • In FY22, Brambles
Slide 8: Financial overview
2 Financial overview NESSA O’SULLIVAN, CFO
Slide 9: FY21 results
FY21 results Summary US$m FY21 Change vs. FY20 • Sales growth +7% reflecting +4% price and +3% volume Actual Constant growth driven by pricing actions to recover higher cost-to- Continuing operations serve and higher volumes in the pallets and Automotive FX FX businesses Sales revenue 5,209.8 10% 7%
Slide 10: FY21 Group sales revenue growth
FY21 Group sales revenue growth Pricing in line with higher cost-to-serve and volume growth across the pallet and automotive businesses Growth across all segments Price realisation and volume momentum FY21 Sales revenue growth (US$m) Price/mix and volume contribution to growth +7% 171 +6% 39 Pricing
Slide 11: Lumber inflation
Lumber inflation Record lumber inflation and pallet shortages due to global supply challenges FY21 Brambles cost impact Market dynamics Market impact weighted to capex Timber prices well above historic Capital expenditure: US sawmill labour and norms in key markets Lumber represents ~80% of new pall
Slide 12: Group profit analysis (US$m)
Group profit analysis (US$m) Sales contribution and surcharge income offset higher operating costs and investments for future growth North American lumber surcharge2 income partly recovered higher capex cost of new pallets and increased cost Higher third-party freight of repair lumber in plant costs
Slide 13: CHEP Americas
CHEP Americas Margin and ROCI improvements in challenging operating environment FY21 Change vs. FY20 FY21 performance • Pallets revenue +7% largely driven by pricing actions in the Actual Constant US and Latin America to recover the higher cost-to-serve combined (US$m) FX FX with COVID-19 related de
Slide 14: CHEP Americas profit analysis (US$m)
CHEP Americas profit analysis (US$m) Effective recovery of inflation and cost-to-serve increases through price realisation, surcharges and supply chain efficiencies North American lumber surcharge2 partly recovered Additional handling costs and higher lumber capex costs of new pallets repair costs p
Slide 15: US asset productivity and control
US asset productivity and control Range of actions being implemented and under development to improve asset efficiency Market dynamics Actions taken • Increased gap between recycler return incentives and market value • Increased small truck fleet to collect lower pallet quantities at a higher freque
Slide 16: US pallets revenue
US pallets revenue Increased price realisation in an inflationary environment and volume growth from existing customers US pallets revenue FY21 revenue growth components: growth breakdown • Price/mix growth of 5% driven by initiatives to recover higher cost-to-serve • Like-for-like volume growth of
Slide 17: US margin progress
US margin progress ~1pt margin improvement in FY21 despite a range of cost challenges, ~2pt improvement over the last two years Pressures Mitigating actions Status Progress FY21 Supply chain • Annual transport and network optimisation exercise undertaken Cost inflation cost out during the year Pri
Slide 18: CHEP EMEA
CHEP EMEA Revenue momentum and profit growth despite COVID-19 and Brexit uncertainty FY21 Change vs. FY20 FY21 performance Actual Constant • Pallets revenue +5%: Pricing realisation across the region, net (US$m) FX FX new wins in Central & Eastern Europe including Germany, and increased demand due t
Slide 19: EMEA sales growth
EMEA sales growth Volume momentum and price realisation in the pallets business, recovery in Automotive FY21 revenue growth components: CHEP EMEA1 revenue growth breakdown • Price/mix growth +2% largely reflecting contractual price indexation across the region and additional pricing to recover infla
Slide 20: CHEP Asia-Pacific
CHEP Asia-Pacific Strong pallet performance and one-off compensation offset Australian RPC contract start-up costs FY21 Change vs. FY20 FY21 performance Actual Constant • Pallets revenue +6%: Price realisation in Australia and strong (US$m) FX FX like-for-like volume growth in both Australian pallet
Slide 21: Cash flow
Cash flow Positive Free Cash Flow generation of US$126.2m, excluding timing benefits (US$m, actual FX) FY21 FY20 Change Positive Free Cash Flow of US$341.2m including US$215m of EBITDA1 1,742.6 1,561.8 180.8 timing benefits relating to US$180m of pallet capex delayed to Capital expenditure (cash bas
Slide 22: Asset efficiency
Asset efficiency Group pooling capex to sales ratio includes ~3pt impact of lumber inflation Group FY21 pooling capex of US$1,072.8m increased US$228m at constant currency compared to FY20: Lumber inflation • ~US$150m increase reflecting record levels of lumber inflation, particularly in the fourth-
Slide 23: Balance sheet
Balance sheet Balance sheet remains strong and well placed to complete A$2.8b capital management programme June 21 June 20 • Increase in net debt of US$343m reflects A$702m (US$523m) of share buy-backs as part of Net debt1 US$2,055m US$1,712m the A$2.8b capital management programme with these outflo
Slide 24: Summary
Summary Resilient performance and foundations set for an ambitious future • Agility of our people and network advantage enabled us to deliver our FY21 commitments despite the challenging operating and cost environment • Top line growth and profit leverage reflecting resilience of the business with d
Slide 25: Pioneering Regenerative Supply Chains
Full-Year Pioneering 2021 Results presentation Regenerative 17 August 2021 Supply Chains
Slide 26: Appendix
@) Appendix
Slide 27: Sales revenue by region and sector
Appendix 1 Brambles: Sales revenue by region and sector FY21 sales revenue by region FY21 sales revenue by sector India, Middle East, Eastern Europe Asia Turkey, Africa Auto 4.0% 3.6% 1.3% Other 5.2% Packaging 12.3% 2.5% Latin America General 6.8% retail 1.4% USA & ANZ Canada Storage Fast- 8.8% 44.0
Slide 28: Major currency exchange rates
Appendix 2 Major currency exchange rates1 USD EUR AUD GBP CAD MXN ZAR PLN NZD BRL FY21 1.0000 1.1959 0.7477 1.3538 0.7812 0.0482 0.0654 0.2644 0.6982 0.1859 Average FY20 1.0000 1.1064 0.6692 1.2582 0.7445 0.0489 0.0637 0.2530 0.6354 0.2239 30 Jun 21 1.0000 1.1901 0.7511 1.3845 0.8066 0.0505 0.0698 0
Slide 29: FY21 currency mix
Appendix 3 FY21 currency mix (US$m) Total USD EUR AUD GBP CAD MXN ZAR PLN NZD BRL Other1 Sales revenue 5,209.8 1,981.5 1,192.7 398.5 370.4 313.2 235.6 185.7 94.6 59.1 53.5 325.0 FY21 share 100% 38% 23% 8% 7% 6% 5% 4% 2% 1% 1% 5% FY20 share 100% 39% 22% 7% 7% 6% 5% 4% 2% 1% 1% 6% Net debt2 2,055 1,04
Slide 30: Credit facilities and debt profile
Appendix 4 Credit facilities and debt profile Committed Uncommitted Maturity Type1 Debt drawn Headroom facilities facilities (US$bn at 30 June 2021) <12 months Bank - 0.3 - 0.3 1 to 2 years Bank 0.5 - - 0.5 2 to 3 years Bank/EMTN2 0.9 - 0.6 0.3 3 to 4 years Bank 0.2 - - 0.2 4 to 5 years Bank/144A3 0
Slide 31: Net plant and transport costs/sales revenue
Appendix 5 Net plant and transport costs/sales revenue Net plant cost/sales revenue Net transport cost/sales revenue (before NA lumber surcharge1) (Net of transport & fuel surcharges) FY21 FY20 FY21 FY20 CHEP Americas 39.0% 38.3% 24.0% 23.6% CHEP EMEA 24.2% 24.2% 21.5% 21.0% CHEP Asia-Pacific 35.2%2
Slide 32: CHEP EMEA: Underlying Profit analysis (US$m)
Appendix 6a CHEP EMEA: Underlying Profit analysis (US$m) (11) (9) (12) 1 (3) 22 65 463 441 410 FY20 Volume, Depreciation Net Net IPEP Other FY21 FX FY21 1 Underlying price, mix plant costs transport Underlying Underlying Profit costs Profit Profit (constant FX) 1 Sales growth net of volume-related c
Slide 33: CHEP Asia-Pacific: Underlying Profit analysis (US$m)
Appendix 6b CHEP Asia-Pacific: Underlying Profit analysis (US$m) (4) 14 (6) 18 (2) (2) 10 146 132 118 FY20 Volume, Depreciation Net Net Other Comp- FY21 FX FY21 1 Underlying price, mix plant transport ensation Underlying Underlying Profit costs costs Profit Profit (constant FX) 1 Sales growth net of
Slide 34: Capital expenditure on Property, Plant and Equipment
Appendix 7a Capital expenditure on Property, Plant and Equipment1 (Accruals basis, US$m) 1,219 1,042 993 968 264 809 280 140 302 Pooling capex 220 includes lumber inflation impacts 809 of ~US$150m 679 639 603 536 88 123 149 146 53 FY17 FY18 FY19 FY20 FY21 2 3 Other PP&E Replacement (DIN) Growth 1 Fi
Slide 35: Capital expenditure bridge FY20-FY21
Appendix 7b Capital expenditure bridge FY20-FY21 Change vs. FY20 Accruals basis FY21 (constant FX) Pooling capex: sales ratio of 20.6% in FY21 Pooling Capex US$1,073m US$228m ~3pt increase over prior year (FY20: 17.4%) Higher per unit pallet costs reflecting lumber inflation, primarily in the Lumber
Slide 36: Glossary of terms and measures
Appendix 8 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: Actual currency/FX Results translated into US dollars at the applicable actual monthly exchange rates ruling in each period Average Capital Invested
Slide 37: Glossary of terms and measures
Appendix 8 Glossary of terms and measures Except where noted, common terms and measures used in this document are based upon the following definitions: FIFO First In First Out Like-for-like revenue Sales revenue in the reporting period relating to volume performance of the same products with the sam
Slide 38: Disclaimer
Disclaimer The release, publication or distribution of this presentation in certain jurisdictions may be restricted by law and therefore persons in such jurisdictions into which this presentation is released, published or distributed should inform themselves about and observe such restrictions. This
Slide 39: Investor Relations contacts
Investor Relations contacts Sean O’Sullivan Vice President, Investor Relations & Corporate Affairs sean.osullivan@brambles.com +61 412 139 711 Raluca Chiriacescu Vice President, Investor Relations & Corporate Affairs raluca.chiriacescu@brambles.com +44 7810 658044 1 Result highlights 2 Financial ove